Archive: 17 November 2014

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Another CFPB Loan Originator Compensation Enforcement Action
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A Cure for What Ails You – Or At Least One Thing That Does: CFPB’s Cure for “Points and Fees” Mistakes

Another CFPB Loan Originator Compensation Enforcement Action

By: Kris D. Kully

The Consumer Financial Protection Bureau (CFPB) has once again charged a mortgage lender with paying compensation to loan originators based on loan terms, which is prohibited under the Truth in Lending Act and its Regulation Z. This week, the CFPB asked a federal court to approve an order requiring Franklin Loan Corporation (which lends in California and Illinois) to pay $730,000 for allegedly paying loan originators quarterly bonuses based on loan terms.

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A Cure for What Ails You – Or At Least One Thing That Does: CFPB’s Cure for “Points and Fees” Mistakes

By: Kris D. Kully

In a recent amendment to Regulation Z, the CFPB offers a tonic to mortgage lenders and their assignees that have struggled with the “points and fees” calculation for Qualified Mortgages (QMs). The CFPB’s cure allows lenders or assignees of covered loans to reestablish the QM status of a loan for which the amount of points and fees inadvertently exceeds the thresholds set by the CFPB’s Ability to Repay/QM Rule. The cure is available for loans consummated on and after November 3, 2014, but it expires January 10, 2021.

To read the full alert, click here.

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